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May 20, 2015 Increasing The Visibility of Internal Audit ORIMA – Central Bankers Conference
May 20, 2015
Increasing The Visibility of Internal Audit
ORIMA – Central Bankers Conference
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Common Understanding of Visibility & Why Relevance and Role of Internal Audit How IA Visibility Impacts the Interaction with
Stakeholders Summary of Survey Results General Recommendations
Agenda
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Improve stakeholders perception of audit’s role Improve stakeholders awareness of Internal audit’s services Ensure stakeholders understand the value of internal auditing Reduce false expectations and frustrations Facilitate increased communication Build stakeholders trust and confidence
A. - Why Increase Visibility
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Critical step before defining a visibility strategy This role cannot be one size fits all, and should be customized based
on each organization needs and expectations
Differentiate the role of internal audit from other internal bodies that provide control & risk- management services e.g. ERM, compliance groups, ORM); define the relationship to these groups
B.- Role of Internal Audit
IIA - Capability Model Five Capability Levels Six Elements of Internal Audit
IA Recognized as
Key Agent of
Change
Leadership
Involvement w/
Professional
Bodies
Continuous
Improvement in
Professional
Practices
Reporting of IA
Effectiveness
Effective and
Ongoing
Relationships
Independence,
Power, and
Authority of the IA
Activity
Overall
Assurance on
GRMC
IA Contributes to
Management
Development
Audit Strategy
Leverages
Organization’s
Integration of
Qualitative and
Quantitative
Performance
CAE Advises and
Influences Top-
level
Management
Independent
Oversight of the
IA Activity
Advisory
Services
Team Building
and
Competency
Quality
Management
Framework
Performance
Measures
Coordination
w/ Other
Review Groups
Management
Oversight of
the IA Activity
Compliance
Auditing
Individual
Professional
Development
Professional
Practices &
Framework
IA Operating
Budget
Managing
within the IA
Activity
Full Access to
the
Organization
Ad hoc and unstructured; isolated single audits or reviews of documents and transactions for accuracy and compliance;
outputs dependent upon the skills of specific individuals holding the position; no specific professional practices established
other than those provided by professional associations; funding approved by management, as needed; absence of
infrastructure; auditors likely part of a larger organizational unit; no established capabilities; therefore, no specific key
process areas.
PWC - Global Opinion Stakeholders expectations Audit services provided
TRUSTED ADVISOR
INSIGHT GENERATOR
PROBLEM SOLVER
ASSURANCE PROVIDER
INSIGHT GENERATOR
PROBLEM SOLVER
ASSURANCE PROVIDER
ASSURANCE PROVIDER
PROBLEM SOLVER
ASSURANCE PROVIDER
Unrealised value
Objective assurance
Proactive advice
Enterprise risk coordination
Business partner
This PwC survey showed that when stakeholders indicated that they viewed IA as providing significant value, there was a different level of service being provided.
Incremental value contributed
Source: PwC 2013 state of the internal audit profession study
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Define Brand The "name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers.“ Source: American Marketing Association Dictionary. Develop Concepts & strategies to market the IA brand Brand Equity - setting value of internal to customers Brand Identity - model used to manage brand Brand Leadership – positioning, and brand-building
programs Brand Portfolio Strategy – prioritization & balance
C.- Brand Internal Audit To Increase Visibility
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Brand Relevance (3 key questions from Senior Mgt.) • Who are you? • What do you do? • Why should I care?
C.- Brand Internal Audit To Increase Visibility
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Identifying Improvement Opportunities Mitigating Risks Increase Efficiency Stronger Corporate Governance Stronger Financial Reporting & Compliance
How IA Add Value
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D. - Survey Feedback
Among all18 members of CBIA 100% participation Four main sections: Services/Exposure;
Stakeholders; Communication; Outreach
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Section A: Services/Exposure
28%
72%
100%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Other
Consulting
Assurance
Type of services
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Section B: Stakeholders
13 15
8
16 18
4
14
8 7
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Stakeholders satisfaction
93.00% 100.00%
79.00% 86.00%
21.00%
Only 78% of CBIA members measure stakeholders’ satisfaction
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Communications (Continued)
0 2 4 6 8 10 12 14 16 18
Audit Charter
Roles and mission of IA
Independence and objectivity…
Organizational chart
Staff qualifications
Audit Manual
Performance Standards
Audit Committee information
Audit reports
Audit follow-up information
What do you include in your internal web site?
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Section D: Outreach
Yes 78%
No 22%
Do you have any collaboration program with other Central Banks?
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General Recommendations
Look at the changing profile of the company & change the profile of the audit function
Establish appropriate metrics to measure the current visibility of IA to evaluate the progress of future strategies
There is room for enlarging rotational & collaboration programs: between business areas and Internal audit departments and also across Central Banks. Develop pilot workgroup to report results to CBIA
Brand internal audit & develop marketable approach. Good communication channels
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Questions & Comments
